Left warns Democrats not to back Obama plan on Social Security

President Obama’s latest budget plan is getting hit by not-so-friendly flak from the left because of a proposal to alter how Social Security benefits are doled out. And Democrats in Congress are being warned not to support the measure – or else.

Left-wing groups object to the White House’s willingness to link Social Security to the so-called chain consumer price index. Such a change would result in retired people getting slightly smaller increases in their payments, but it could save the federal government more than $200 billion over the next decade . Read more about chained CPI here.

Democrat Keith Ellison

Several liberal congressmen, Alan Grayson of Florida and Keith Ellison of Minnesota, plan to hold a “national call” on Wednesday to explain their opposition. Earlier Wednesday, the Progressive Change Campaign Committee said it delivered a petition to the White House signed by 2 million people who oppose the chained-CPI proposal.

Another left-wing group, Democracy for America, has stepped up its attacks and is now threatening to run primary opponents against any Democrat who backs the president on his Social Security proposal.

“Real Democrats don’t cut Social Security benefits, period, and it’s positively shameful that a Democratic president is leading the charge to do so,” said Jim Dean, chairman of Democracy for America, in a prepared statement.

“So, let’s be clear: Any congressional Democrat who goes along with the plan the president is proposing and votes to cut Social Security benefits should be prepared to face the ire of the progressive base of the Democratic party and the primary challenges that come along with it,” Dean said.

Obama included the Social Security proposal apparently to show his willingness to compromise with Republicans on efforts to rein in large U.S. budget deficits. In return, he wants them to accept higher taxes on the rich and the elimination of certain tax breaks for business. His budget also calls for increased spending in a number of areas.

If his outreach to Republicans is rejected, as expected, Obama can argue to the public that it’s conservatives who are unwilling to compromise. He could use that argument in the 2014 elections as part of goal of recapturing Democratic control of the House of Representatives in the president’s final two years of office. The GOP-controlled House has regularly stymied the president since conservatives seized power in 2010.

Still, the chained CPI plan could fall prey to both the left and the right. While the left sees the change as a cut in benefits, many conservatives might object to a stealth tax increase. Chained CPI would also raise about $125 billion in tax revenue over the next decade by slowing the increase in inflation-adjusted tax brackets.